A typical manufacturing supply chain includes an original equipment manufacturer (“OEM”), which designs and sells equipment such as computers or other electronic equipment. To keep costs down, OEMs often contract out the manufacture of at least some of the individual components of the product, such as electronic boards, to contract manufacturers (“CMs”). The CMs must obtain the parts with which to build the boards, such as resistors and integrated circuits, which are manufactured by component manufacturers or vendors. The components are typically not sold directly to the CMs but rather are sold through distributors.
For example, FIG. 1A illustrates a supply chain 2 as is well known in the art. Included in the supply chain 2 are a distributer 16, an original equipment manufacturer (OEM) 12, one or more contract manufactures 14, and one or more vendors 18. As indicated in the figure, each of these sites must communicate with one or more of the other sites as indicated by the arrows.
Each node or link in the supply chain, i.e., each OEMs, distributor, CM and vendor, typically maintains its own private database to track and control inventory, place orders, receive orders, enterprise resource planning (ERP), material requirements planning (MRP), etc. While these supply chain sites share some data, the data is typically maintained in incompatible formats in legacy databases.
The Electronic Data Interchange (“EDI”) standards have been developed to aid in the interchange of information to expedite business transactions by specifying a consistent data interchange format. Yet, in practice, how each supply chain site deals with its external environment, i.e., vendors, CMs, customers, has often been archaic and inconsistent.
Supply chain management is difficult because it depends on the axiom that a business has fundamentally correct processes. Unless the foundation for activity is well thought out, managing the chain further aggravates a company's environment. For example, not all of the information needed may be available on the legacy databases. Often, teams of programmers are utilized to implement custom design changes to these legacy databases that become overwhelmingly complex. Whether these changes are implemented by outside consultants or by in-house staff, lack of clear project goals, effective monitoring and performance review constantly plague the process.